HTC invests in technology after disappointing fourth quarter

New product range will regain momentum, says CFO

By Michael Kan

February 6, 2012

IDG News Service

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After facing a disappointing financial fourth quarter, HTC has reviewed its under-performing products from last year, making changes in design and components for its future smartphones, according to its CFO Winston Yung.

"With our new product cycle we should regain our business momentum," Yung said.

The Taiwanese smartphone vendor ended 2011 with fourth quarter profit declining by 26 percent year-over-year. During that quarter, HTC faced strong competition in the US from Apple's iPhone and products from Samsung, Yung said.

HTC expects a decline in revenue for this year's first quarter as it transitions into its new product cycle. Yung said first quarter revenue will range from NT$65 billion (£1.39 billion) to NT$70 billion. This would be down from the NT$104.1 billion in revenue generated for the same period last year.

"Q1 is not normal. We expect this to be a transition," he said. Yung declined to discuss future products, or offer shipment dates, but said revenues will return to normal in the second quarter.

As the company works to improve its products, Yung said consumers will no longer have to sacrifice battery life or design for fast connection speeds when buying a 4G LTE phone.

"In 2012, these problems will be resolved and see significant improvement. So using these LTE phones won't mean having a compromise," he said, noting that previous 4G phones were not as attractive to consumers.

Although HTC faced a decline in profits for the fourth quarter, the company has seen its business grow quickly in China, Yung said. At the end of last year, the company had expanded to establish 2,000 retail outlets in the country, he added.